2007/08 Corporate Responsibility Report - British Airways · British Airways 2007/08 Corporate...

2007/08Corporate Responsibility Report

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Americas AntiguaAtlantaBaltimoreBarbadosBermudaBostonBuenos AiresCalgaryChicagoDallasDenverGrand CaymanGrenadaHoustonKingstonLos Angeles

Mexico CityMiamiMontrealNassauNew York (JFK)New York (Newark)OrlandoPhiladelphiaPhoenixPort of SpainProvidencialesRio De JaneiroSan FranciscoSao PaoloSeattleSt Lucia

TampaTobagoTorontoVancouverWashington

Middle East& South Asia

Abu DhabiBahrainBangaloreChennaiDelhiDhakaDohaDubaiIslamabadKolkataKuwaitMumbaiMuscatTel Aviv

Asia/Pacific BangkokBeijingHong KongShanghaiSingaporeSydneyTokyo

Africa AbujaAccraAlgiersCairoCape TownDar Es SalaamEntebbeJohannesburgLagosLuandaLusakaMauritiusNairobiTripoliTunis

UK & Ireland

AberdeenDublinEdinburghGlasgowJerseyManchesterNewcastleNewquay

Europe AlicanteAmsterdamAntalyaAthensBarcelonaBariBasleBelgradeBerlinBolognaBordeauxBrusselsBucharestBudapestCagliariCataniaCopenhagenDresden

DubrovnikDusseldorfFaroFrankfurtGenevaGenoaGibraltarGrenobleHamburgHelsinkiIstanbulIzmirKievKrakowLarnacaLisbonLuxembourgLyon

MadridMalagaMaltaMarseilleMilan (Linate)Milan (Malpensa)MoscowMunichNaplesNiceOsloPalmaParisPisaPoznanPraguePristinaRome

SalzburgSarajevoSofiaSt PetersburgStockholmStuttgartThessalonikiTiranaToulouseTurinVarnaVeniceVeronaViennaWarsawZurich

Where we fly toas at May 15, 2008*

* British Airways operated routes

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British Airways 2007/08 Corporate Responsibility Report / 01

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British Airways is the UK’s largestinternational scheduled airline, flying to over 300 destinations at convenienttimes, to the best located airports.

Who we are

We are one of the world’s leading scheduled internationalpassenger airlines. Our principal place of business is Heathrow,one of the world’s premier airport locations, which serves alarge geographical area with a comparatively high proportion of point-to-point business. We also operate a worldwide aircargo business, largely in conjunction with our scheduledpassenger services. Operating one of the most extensiveinternational scheduled airline route networks, with ourcodeshare and franchise partners, we fly to more than 300 destinations worldwide. In 2007/08, we carried more than 33 million passengers.

Our airline network generates economic value by meeting thedemand for business travel, by providing vital arteries for tradeand investment, as well as providing leisure travel opportunitiesfor individuals and families. In 2007/08, we earned over £8.7 billion in revenue, 3.1 per cent up on the previous year.Passenger traffic accounted for 86.2 per cent of this revenue,while 7.0 per cent came from cargo and 6.8 per cent fromother activities. We carried 805,000 tonnes of cargo todestinations in Europe, the Americas and throughout theworld. At the end of March 2008, we had 245 aircraft inservice, compared to 242 in March 2007.

Our fleet: 245 aircraft

57Boeing 747s

13Boeing 757s

25Airbus A320s

42Boeing 777s

33Boeing 737s

33Airbus A319s

21Boeing 767s

11Airbus A321s

10Avro RJ100s

Contents 2 Chief Executive’s message 4 Highlights 6 Environment 14 Community Investment18 Marketplace – customers 21 Marketplace – suppliers 24 Workplace www.ba.com/corporateresponsibilityreport08

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Last year turned out to be amixed one for British Airways.We celebrated some realtriumphs – including achieving a 10 per cent operating margin for the first time ever,announcing exciting newservices and placing importantaircraft orders. However, theopening of Terminal 5 did notgo as we had hoped or planned.Despite this, I think we can feelconfident about our future.

Chief Executive’s message

02 / British Airways 2007/08 Corporate Responsibility Report


VisionOur vision is to become the world’s most responsible airline.This is best achieved by ensuring our flying activity is sustainable,and to do so we have devised a series of strategic goals andprogramme plans to deliver this ambition.

It is clear that the key issue facing British Airways and the aviationindustry as a whole is climate change. We take this issue veryseriously and will do all we can to minimise our impact throughfully supporting the objectives of the Stern* report to achievethe stabilisation of atmospheric greenhouse gas concentrationsat a level that would prevent dangerous man-made interferencewith the climate system.

In recognition of this importance we have established a fifthcorporate goal on the environment, focusing on our carbonemissions. This provides a clear signal of our seriousness andcommitment to delivering lower carbon emissions throughimproved technology, more efficient operating procedures and carbon offset and emissions trading activity.

Our target has been set at 83 grammes carbon dioxide perpassenger kilometre (83g CO2/pkm) by 2025, representing a 25 per cent reduction over the 2005 base figure of 111g CO2/pkm.

We support a comprehensive global approach for aviation to be included in post Kyoto agreements with tough targets to reduce CO2 emissions.

GovernanceIn November 2007, we created a new Corporate Responsibilitydepartment, led by the Head of Corporate Responsibility. Thishas brought together our Community Relations and Environmentteams, and in June we expanded this team further. The team’sactivities are overseen by our Corporate Responsibility Board(CRB), which I chair and is attended by Baroness Kingsmill, a non-executive director. In addition, the CRB includesrepresentatives of health and safety, as well as people withresponsibility for emerging issues such as climate change,responsible procurement and fuel management. The CRB,

which meets quarterly, is supported by the CorporateResponsibility Team and Corporate Responsibility Championsdrawn from across the business.

StrategyOur approach to Corporate Responsibility has three maincomponents – the vision, goals and programme plan.

We have organised the programme under four streams:Environment, Community Investment, Marketplace andWorkplace.

ENVIRONMENT – We recognise that in providing theeconomically vital service of air transport we have an impacton our planet, so our strategy is to ensure we minimise thesenegative environmental impacts. This includes consideration of climate change, air quality, noise and waste.

COMMUNITY INVESTMENT– Our strategy is to supportcommunity and conservation projects, enabling them tobecome self-sustaining. These projects are based in thecountries we fly to.

MARKETPLACE – Our strategy is to work closely with our customers and suppliers to help us build a moresustainable business.

WORKPLACE – Our strategy is to ensure we deliver a moresustainable work environment for all our colleagues.

We have developed a plan containing over 80 programme levelactivities and several hundred individual projects. All this aimsto deliver our Corporate Responsibility strategy. We have alsoidentified performance goals to measure our progress in eachof these four areas.

We believe we now have all the vital elements in place todeliver our overall objective of becoming the world’s mostresponsible airline.

Willie Walsh, Chief Executive


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* Stern report November 2006 – The Economics of Climate Change


Emissions

28% improvementin carbon efficiency since 1990 and we’ve set a new target to further improve by 25 per cent by 2025

Waste

30% recycledHeathrow & London Gatwick with amount to landfill reducing by 9.2 per cent

Noise

95% conformanceto continuous descent approach at Heathrow reducing noisefor the local community

Air quality

Retrofitted 54Boeing 777 engines fitted with the latest technology to reduceoxides of nitrogen (NOX) and improve fuel efficiency

Biodiversity

280 acresreturned to parkland from landfill and other urban uses, adding 10 acres this year and retaining the Wildlife Trust’sBiodiversity Benchmark award

Education

45,000 young peopleinvolved in educational activities in our Community Learning Centre since 1999

International projects

130 projectsrelated to community and conservation in the countries we fly to

Donations

£5.7m in-kind donations for year 2007/08 (measured by Business in the Community)

Change for Good

£25mraised over the 14-year partnership with UNICEF helpingchildren around the world

Colleagues

£600,000 raisedthrough ‘Give as you earn’


Highlights

Environment Community Investment



In 2007/08 we have made significant achievements within all four of our Corporate Responsibility pillars. Some of these are highlighted below.

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Customer convenience

11 languagesnow available for booking online on ba.com

Carbon offsetting

84,000 passengersoffset their carbon emissions on ba.com in the launch from mid-January to May 2008

Terminal 5 – Our new home

114 secondsto complete ‘Fast Bag Drop’ procedures, helping our customers speed through the airport

Responsible procurement

110 hybrid carschosen by the UK sales team, emitting just 110g CO2/pkm

Product

£15.3mapproved for upgrading the customer experience and pursuingLeadership in Energy and Environmental Design certification aspart of the terminal upgrade project at JFK Airport, New York

Training

235,000 daysof training delivered for the year 2007/08, of which the newentrant cabin crew course achieved NVQ Level 2 accreditation

New entrants

3,100 peoplehave joined our Company over the past year

Reward

£35m bonus reward has been shared amongst all employees for the year

Involvement

£611,480 raisedby employees for their chosen charities through our Giving scheme

London 2012

800 volunteeropportunities created for our staff as part of being a Tier one Olympic sponsor

Marketplace Workplace



Environment

Our strategy is to minimise our impact on the environment, with a particular focus on climate change, air quality, noise, waste and resources. Our CorporateResponsibility management system enables us to measure and manage our global impacts.

Systems

Fuel efficiency

Carbon emissions

Noise and air quality

Waste

Investment

Engagement

Our plan

Management systemsDevelop our Corporate Responsibility management system to enable us to measure and manage our global impacts.

25% reduction in grammes of CO2 per passenger kilometre by 2025Work to identify and implement fuel saving opportunities across our operations, including looking at how we fly, what we fly and where we fly.

Carbon tradingWork with the EU to finalise the aviation entry conditions by 2012. Further develop ourcarbon offset scheme for UN-approved renewable energy schemes.

Local noise and air quality standardsReduce the impact of aircraft noise and emissions on the community by modernising our fleet and investigating innovative aircraft operating procedures.

Zero waste to landfillTo achieve zero waste to landfill by 2010. Increase recycling to 50 per cent at Heathrow and Gatwick through simple segregation at source. Incinerate all remaining waste, capturing the heat by-product as electricity.

Research and developmentInvest in specific projects to help improve the understanding of non-CO2 effects in the upper atmosphere.

Aid research into alternative fuels for our aircraft and ground equipment.

Lead the debateContinue in our leadership role in discussions on climate change with the EU, and related industry stakeholders.


To impose it on foreign airlines flying into and out of the EU willprovoke significant international opposition and lead to furtherdelays in implementation. A preferred approach would be torestrict the scheme to intra-EU travel and negotiate a globalframework for addressing inter-continental aviation emissions.

We are actively leading the development of a global agreement in aviation climate policy – both within industry (e.g. at International Air Transport Association (IATA) and as a leading member of the UK Sustainable Aviation Group) andin broader global forums such as the World Economic Forumand the Gleneagles Climate Change Dialogue.

Carbon footprintWe have carried out a reassessment of our carbon footprint,applying the Greenhouse Gas Protocol Standard to aggregateemissions from both direct and indirect sources. The Protocolsets out the guidelines for consolidating and grouping carbonemissions. Scope 1 emissions are derived from the burning of fossil fuels, Scope 2 from the use of electricity at the pointof consumption, and Scope 3 are those emissions which arenot directly attributable to British Airways, such as those fromsuppliers, but which we have elected to include as part of our footprint.

Carbon dioxide emissions* (million tonnes)

* 2005 and 2006 data represent aircraft CO2 emissions as previously reported. 2007 data represents the total British Airways plc Group carbon footprint, including aircraft CO2.

By scrutinising the carbon emissions of our operationsincluding subsidiaries and suppliers, we are now in a strongerposition to identify CO2 reduction initiatives across our Groupactivities, measure performance and establish relevant goals.

Our carbon footprint in 2007 was 17,714,897 tonnes CO2.

17.72007

16.6

16.1

2006

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Aircraft CO2 emissionsCO2 emissions added following footprint reassessment


As part of our new fleetpurchase, we have ordered 12Airbus A380s. Environmental

performance was one of thekey factors in the decision.

© A

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Climate changeWe realise that climate change is perhaps the biggest long-term challenge we face. It is important to recognise that theatmosphere has no preference whether emission reductionscome from aviation or agriculture, from China or the UK. But it does matter that these cuts are achieved in the mosteconomically sensible manner. This message is often lost in the emotional headlines around the issue.

Aviation worldwide accounts for approximately 2 per cent ofglobal CO2 emissions, and allowing for growth, it is forecast bythe UN to produce about 3 per cent by 2050. In comparison,road transport generates about six times as much CO2 andpower generation and deforestation around 10 times as much.

British Airways is determined that the aviation industry plays itsfull part in reducing climate change emissions. We have led theway in establishing and promoting operational best practice,effective policy instruments and customer engagementtowards tackling climate change.

During the year we have made further progress in implementinga comprehensive climate change programme. This includes anextensive reassessment of our carbon footprint, as well asrenewed emphasis on our fuel and energy efficiency initiatives,support for carbon trading to address absolute emissionsgrowth, upgrading of our passenger carbon offset scheme and support for scientific research.

Climate policyWe continue to work to secure the timely and pragmaticinclusion of aviation CO2 emissions into the EU EmissionsTrading Scheme in preference to aviation taxes, which webelieve are ineffective in tackling climate change.

We believe carbon trading is the most effective way ofcontrolling emissions in an economically sensible manner. So when the UK Government endorsed the introduction ofaviation into the EU Emissions Trading Scheme it should havebeen a decision to welcome. But we were disappointed thatthe implementation date was delayed until 2012 and notconfined to intra-EU airlines.

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British Airways plc carbon footprint by scope(as a percentage of total emissions)

Carbon efficiencyWe have developed a company-wide target to improve carbon efficiency, expressed in grammes of CO2 per passengerkilometre (g CO2/pkm) by 25 per cent from 111g in 2005 to83g in 2025. In 2007 our performance was 110.3g CO2/pkm.

This is now one of our overall corporate goals, signalling theimportance of climate change to our business.

Supporting avoidance of deforestationThe felling of forests accounts for 18-25 per cent of globalcarbon emissions and is accelerating. We are working withGlobal Canopy Programme to achieve rational valuation of theworld’s forests, to develop market mechanisms to realise thisvalue and develop sustainable forest management programmeswith local communities.

How does carbon trading work?Carbon trading sets an absolute cap on emissions from the whole economy. Participants are given allowances ofpermitted emissions. If the allowance is too small, thecompany must then either cut emissions, for example,by investing in low emissions technology, buying extraallowances from the market, or undertaking a combinationof the two. Allowance prices reflect the lowest costs ofachieving emissions cuts across the economy.

Scope 1 95%Scope 2 1%Scope 3 4%

2007

Climate scienceWe are supporting a number of climate change scientific researchprojects. These include work led by Cambridge University toinvestigate research pathways for improving understanding ofnon-CO2 aircraft climate effects, the European Commission’sintegration of routine aircraft measurement into a globalobserving system (IAGOS) project which is investigating thefeasibility of using aircraft to collect atmospheric data in-flight,and supporting the work of OMEGA, a government formedgroup to investigate sustainability solutions for aviation.

Carbon efficiency (grammes of carbon dioxide per passenger kilometre)

What is carbon offsetting?Both carbon trading and offsetting carbon emissions arebased on the same idea. By investing in clean technologyor renewable energy, we can balance the emissionscreated by flying by reducing CO2 emissions elsewhere.The money raised from your offset contribution helps to fund projects that reduce the total amount of carbonemitted, e.g. fuel-efficient light bulbs and human-poweredwater pumps. The projects often have other health andsocial benefits, so you can have a positive effect oncommunities as well as the planet. We have offered an offset scheme through ba.com since 2005.

Carbon offset schemeIn September 2005, British Airways became the first airline tooffer its customers the opportunity to offset the CO2 emissionsgenerated by flying. Early in 2008, we unveiled an upgradedcarbon offset scheme, making the offset more user-friendly.Customers are now able to buy an offset at the same time theybook their flights in one transaction on ba.com. Initial take uphas been encouraging, with almost 84,000 passengers offsettingbetween mid-January and May 2008. The total carbon volumefrom these flights was 29,500 tonnes.

110.32007

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Xiaohe Hydro-Electric (Run-of-River) Power Plant, China

is one of our carbon offsetprojects. It is forecast to

generate 54,000 MWh ofelectricity per year and to

reduce CO2 emissions by36,582 tonnes per year.

The new offset scheme makes use of UN certified emissionsreductions to help finance new initiatives in developingcountries such as clean energy projects in China and Brazil.Working with our provider, Morgan Stanley, we search forprojects that not only deliver carbon reductions but offer realcommunity and economic benefits to the areas they support.

About our carbon offset projects

Ningxia Dalisi Wind Farm, China Ningxia province is the second poorest region in the countryand the average wage is just $82 each year. In addition, thefrequent bouts of drought in this area result in many householdsnot having enough food to eat throughout the year. Access to aclean, reliable source of power is an important step in improvingliving standards in the region.

Dalisi Wind Farm will have 27 wind turbines, which are projectedto supply 82,458 MWh of renewable electricity to localbusinesses and communities across the Ningxia region eachyear. Dalisi aims to reduce CO2 emissions by 78,739 tonnesper year, which is equivalent to taking 17,043 cars off the roadeach year or 10,108 households’ electricity use per year1.

Faxinal dos Guedes Hydro-Electric (Run-of-River)Power Plant, BrazilAs Brazil’s economy has grown rapidly in recent years, so hasthe country’s demand for energy. Some of Brazil’s largest coalreserves are in the south, the result of which is that coal is the main fuel for generating power. However, coal releasessubstantial quantities of CO2 and is also a major cause of acidrain and harmful air pollution.

This power plant is a unique project for the Santa Catarinaregion of Brazil. This small, hydroelectric power plant uses theChapecozinho River to generate clean, renewable electricityand is expected to produce 21,725 MWh of electricity peryear. The plant uses the natural river flow with little or noalteration (often described as ‘run-of-river’) to generate powerand has been developed sensitively to minimize the impact on the area’s unique plant and animal life.

Faxinal dos Guedes aims to reduce CO2 emissions by 5,672tonnes annually which is equivalent to taking 1,228 cars off theroad each year or 8,1032 households’ electricity use per year1.

Xiaohe Hydro-Electric (Run-of-River) Power Plant, ChinaIn China, demand for electricity has risen in line with rapideconomic growth. China has vast reserves of coal, providingmuch of China’s existing energy supplies. However, coal is oneof the most CO2-intensive sources of energy.

The Xiaohe Hydro-Electric (Run-of-River) Power Plant will helpreduce regional shortages of electricity by supplying a reliablesource of clean, renewable energy. The project, located onDaxia River in the Xiaohe County of Gansu Province, uses thenatural river flow with little or no alteration to generate electricity.It is forecast to generate 54,000 MWh of electricity per yearand to reduce CO2 emissions by 36,582 tonnes per year. Thiscarbon saving is equivalent to taking 7,918 cars off the roadeach year or 4,696 households’ electricity use per year1.

Xiaohe aims to create 30 permanent jobs and 360 temporaryjobs, bringing in $48.20 million via salaries and employeewelfare per year. This increase in funding will give people in the region the opportunity to break away from poverty.

Offset fast facts• Most popular domestic route – Mainland UK to the

Scottish Islands of Benbecula and Barra;

• Most popular shorthaul route – London to Luxembourg;

• Most popular longhaul route – London to New York;

• Most offset 9.2 tonnes (for a single passenger);

• Average shorthaul offset volume – 0.2 tonnes(approximate cost £3);

• Average longhaul offset volume – 1.5 tonnes(approximate cost £26); and

• Number of countries where offset sold – 86.


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1 Source: US Climate Technology Cooperation.2 Faxinal dos Guedes Project Design Document


Noise and air qualityFleet modernisation At the end of September 2007, we announced the purchaseof new aircraft to replace some of our Boeing 767-300 and747-400s. Environmental performance was one of the keyfactors in the decision and both the Boeing 787 and AirbusA380 aircraft, powered by Rolls-Royce engines, that werechosen are considerably quieter than the aircraft they replace.

We have calculated that the Boeing 787 has a 30 per cent betterfuel efficiency and will emit about 46 per cent less oxides ofnitrogen (NOX) emissions at heights that could contribute tolocal air quality than the Boeing 767 they will replace.

Similarly, the A380 exhibits 17 per cent lower fuel burn perseat and emits about 10 per cent less NOX per take-off andlanding than the Boeing 747-436 aircraft they will replace.

NoiseOur noise energy Key Performance Indicator (KPI) again shows a slight increase over the previous year as a result of theincreased use of our aircraft fleet. However, this is based oncertification data, and does not contain the impacts of betternoise abatement procedures.

Work continues on the Departures code of Practice and theGroup is now meeting at approximately two monthly intervals.Some progress has been made and it is now envisaged that the final ‘Code’, will include ground operations as well.

Working with the Sustainable Aviation group, one initiative has been looking at the potential issues surrounding steeperapproaches into airports. British Airways has also been helpingwith trials being conducted at Marseilles airport.

We continue to promote Continuous Descent Approach (CDA) wherever we are allowed to operate the procedure, and investigate ways of further developing it with National Air Traffic Services (NATS) and the aircraft manufacturers. At Heathrow airport, our CDA performance was 95 per centon track for the last calendar year as opposed to 83.5 per centfor the airport average.

Our track-keeping performance also continues at a high levelwith 95 per cent on-track at Heathrow compared to 84 per centfor the airport average.

We recorded 47 departure violations at Heathrow airport in2007, principally as a result of B747-400 departures beingdelayed into the more stringently regulated night period.

Total noise energy from British Airways aircraft (million ‘quota count’ equivalents)

Air qualityWe continue to use the approved ‘assumed temperature method’for reducing our take-off thrust to the lowest available, for asmany of our departures as is allowed. This is the most effectiveway of reducing NOX emissions that impact local air quality.

We continue to work with the International Civil AviationOrganisation (ICAO) to help develop guidance for modellingaircraft inputs to local air quality.

This year the emissions of NOX below 1,000ft at Heathrow for our aircraft operations, has shown a slight increase at 1,107 tonnes. Again, similar to our noise KPI, this reflects the increased efficiency of use of our current aircraft fleets.

Total NOX emissions from British Airways aircraftoperations below 1,000ft at London Heathrow airport (tonnes)

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2006

2005

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1,096

1,080

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2007

2006

2005

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Adjusted for new quota count 0.25 groupingNot including quota count 0.25 grouping




We are members of the BAA Heathrow Clean VehiclesProgramme and have been awarded their Diamond rating, thehighest award possible. As part of the programme, we aim toachieve a 5 per cent reduction in the mileage of our groundvehicles by the end of 2008 and a 10 per cent reduction inmileage by 2011.

Less waste, more recyclingThe management of resources and waste continues to be a priority issue. The challenge is to manage a complex range of wastes generated by a variety of business activities.

Our aim is to reduce waste at source, but where this is notpossible the priority is to find ways to reuse it, whether inwhole or part. We are committed to recycling any remainingwaste, with an overall goal of reducing our reliance on landfillfor final disposal. As technology and facilities become available,we will explore the use of incineration with energy recoveryand other compatible methods to avoid disposal to landfill.

Such efforts are having results, with figures showing that the total amount of waste managed through our contracts at Heathrow and Gatwick has decreased by 3.3 per cent to26,041 tonnes. We have set a target to reduce waste perpassenger at Heathrow and Gatwick by 2 per cent per year. In 2007 we achieved a year-on-year reduction of 2.6 per cent.

The proportion of waste at Heathrow and Gatwick disposed to landfill has continued to reduce and is once again some 10 per cent less than the previous year. Currently, 67.4 per centof our solid waste at these airports goes to landfill (down from68.4 per cent in 2006). We are working to provide alternativemeans of disposal towards our target of zero landfill by 2010.

Recycling opportunities come in many different guises. Forexample, we have built upon our newspaper recycling trial onshorthaul aircraft arriving at Heathrow and have now extendedthis to some other destinations in Europe. Overall, we recycled30 per cent of waste at our main operational hubs of Heathrowand Gatwick. This is two points better than the previous year(28 per cent). We have set ourselves a target of 50 per centrecycled by 2010. We have installed new recycling centres atour head office segregating our waste further to include plasticcups and lids and paper beverage cups.

Engineering waste championsTo improve recycling across engineering operations arecruitment programme took place to develop a network ofwaste champions. All the volunteers took part in a trainingprogramme which included visits to waste reprocessingfacilities and a waste awareness course certified by theChartered Institution of Wastes Management. With a greaterunderstanding of the principles of waste management eachchampion was then able to assess their own work area andproduce action plans to improve recycling facilities. Supportedby the British Airways Property team and our waste contractor,a number of new segregation schemes were introducedresulting in a decrease in engineering waste sent to landfill.

Waste minimisation and recycling is an important criteria in our procurement process and forms part of a full life costassessment. During the year, we have continued to work withour furniture management partner Amaryllis, to reuse andrecycle unwanted office furniture.

We also recognise water as a valuable resource and weroutinely monitor water consumption whenever possible. We managed to achieve a 9 per cent reduction in our waterconsumption at our main London hubs of Heathrow andGatwick, compared to the previous year.

Waste management methods Heathrow and Gatwick (tonnes)

Liquid treatment 5,883Landfill 3,688Recycled 1,343Liquid recovery 306Incineration 134

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At Terminal 5, the MercedesCitaro Bus is part of a £25 million

investment in ground vehiclesadhering to the latest exhaust

emission standards, meeting thefuture Euro 5 emission standard.



BiodiversityWe are committed to protecting and enhancing HarmondsworthMoor, the parkland surrounding our Head Office. We have now had one complete year of working to the requirements of the Wildlife Trust’s new Biodiversity Benchmark for LandManagement, and were successfully audited by them again in March this year.

This year, two varieties of Wainscot moths were identified inone of the reed beds in the parkland, and two otter footprintswere also positively identified suggesting that these animals hadpassed through the parkland along one of the river courses.

Harmondsworth Moor has received the Green Flag Awardagain, which is recognised as setting the national standard forparks and open spaces in England and Wales. This prestigiousaward has been retained by British Airways for a number ofyears, with the objective to encourage the provision of goodquality public parks and green spaces that are managed inenvironmentally sustainable ways.

Terminal 5 – Our new homeEnvironment is at the heart of the design and construction ofour new home at Terminal 5 and will continue to be an integralpart of its operation.

At the earliest stages of design, the independent EnvironmentalAssessment Advisory Group was established to advise ondesign and construction to ensure that the impact on theenvironment was minimised.

Noise and emissionsReducing noise and emissions was a key consideration in thedesign and operation of Terminal 5.

Fixed electrical ground power and pre-conditioned air has beenprovided on all pier stands to reduce the need for using theaircraft’s auxiliary power unit when parked on stand, avoidingboth noise and local emissions.

An investment of £25 million was made in ground vehiclesadhering to the latest exhaust emission standards, including 38 new buses meeting the future Euro 5 emission standardand 150 new electric baggage tugs.

All deliveries to the new terminal go through our localconsolidation centre reducing vehicle movements around the campus.

The terminal has a good public transport hub, including a newstation providing links to London Paddington on the HeathrowExpress and the Piccadilly Line on the London Underground.

EnergyTo address energy efficiency, challenging energy targets wereset for all the terminal buildings and British Airways airfieldbuildings.

The main terminal is glazed on all facades, reducing the needfor artificial lighting, whilst louvers have been fitted to thesouthernmost facades to provide shading to prevent solar gain.A lighting management system controls the lighting needs forparticular areas at particular times of the day or for certainweather conditions.

Energy-efficient fittings have been installed into the terminalbuildings, and chilled water to cool the building is supplied bythe efficient ammonia chillers in the Terminal 5 energy centre.

Energy-efficient systems have also been built into our industrialairfield buildings including automated lighting controls, movementdetectors, light detectors, and energy-efficient lamps. Buildingmanagement systems have been installed so that we canmonitor and manage our energy consumption effectively.

Water A terminal with a capacity of 30 million passengers had thepotential for a significant impact on the local water supply. Byusing ground and rainwater, our demand on the public supply is reduced by 70 per cent.

In our Arrivals lounge we have installed vacuum flush toiletsthat use just 1.2 litres per flush instead of a standard six litres.Our taps and showers are fitted with water-saving devices suchas automatic sensors and flow restrictors. Our showers are alsoaerated, a mix of air and water, to reduce water consumption.



What next?• Continue readiness for inclusion of aviation in the EU

Emissions Trading Scheme;

• Offer customers the opportunity to offset when they use our Manage My Booking facility online, so that passengerscan offset at any time prior to their departure;

• Provide additional recycling arrangements at our groundfacilities and on board our aircraft. Researching sustainablepackaging materials for our on board catering product;

• Support further environmental research, for example, non-CO2 effects on the upper atmosphere and alternative fuels;

• Continue to develop our programme on avoidance ofdeforestation with Global Canopy;

• Further develop aircraft operating procedures to minimisenoise and NOX;

• Continue to investigate the impact of emission from tyresand brakes on the local environment;

• Maintain our biodiversity benchmark at our head office; and

• Engage with our suppliers to reduce their carbon footprint.


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Waste and effluentOver 97 per cent of all waste from the construction site was reused, recycled or recovered. During operation we areseeking to segregate at source as much waste as possible tomeet our recycling targets. Colleagues and our customers arealso encouraged to recycle their waste.

Within our staff accommodation areas we have installedrecycling facilities for mixed paper, plastics, cans and glass.

We are segregating waste produced in our lounges and will beproviding our customers with facilities to recycle their waste. Allpackaging waste is removed at our delivery consolidation centre.

A segregation facility for the management of hazardous aircraftmaintenance wastes has been installed at the head of stand,allowing greater recovery of engineering wastes.

Our state-of-the-art de-icing plant has been designed withcontrols to prevent the discharge of effluent when fillingtankers with fluid. There is a radio frequency transmittervehicle recognition system that will identify the vehicle andprovide details of tank fill volumes.

Our vehicle and chassis wash plant has been designed as aclosed loop recycle system. All wash effluent will be recycled,cleaned and reused in the plant.

Sustainable resourcesAll timber used in Terminal 5 was from a sustainable source. In our lounges we used oak and pear wood from Mehling andWisemann in Germany for furniture and veneers. This wood is Forest Stewardship Council (FSC) accredited, sourced fromthe Spessart region of Northern Bavaria. The wood has beensmoked and has undergone a chemical alteration process togive it a darker appearance.

We eliminated as far as practically possible the use of PVC inTerminal 5. We approved small amounts of PVC where therewas no practical alternative such as in toilet ceilings andvacuum drainage pipe work in our lounges.

We have also been innovative in our choice of materials. The shower pavilions in our lounges are decorated with a fauxtimber cladding that is in fact recycled plastic milk bottles.

Environment is at the heart ofthe design and construction of

our new home at Terminal 5and will continue to be an

integral part of its operation.



Community Investment

We believe that consideration to our impact on the environment should resonatebeyond our core business. We believe that we should invest our resources incommunity, tourism and conservation projects where we fly to across our network,and in supporting the local communities where we fly from.

Environment

Donations

Education

Waste

Investment

Engagement

Our plan

Environmental projectsInvest in environmental projects such as renewable energy and ‘avoided deforestation’ programmes.

GivingDonate travel awards, cargo, excess baggage, and recycled merchandise in support of our community and conservation programmes.

LearningInvest in education initiatives in communities we fly to. Develop the community learning centre at Heathrow to promote educational opportunities for young people around Heathrow.

Community awarenessWaste minimisation and recycling workshops for students.

130 projectsInvest in our community and conservation projects to facilitate their self-sustainability.

Award-winning partnershipsContinue to work with UNICEF to raise money for children around the world.


Community Investment – Connecting communitiesWe are committed to developing strong communitypartnerships. Our priorities for investment include: educationand youth development, supporting our colleagues, environment,sustainable tourism and heritage. In 2007/08 we supported130 community and conservation organisations in thecommunities we fly to, donating travel awards, excess baggage,cargo capacity and funding for programmes. The programmesrange from internationally renowned organisations such as theNatural History Museum to conservation projects such as theSheldrick Wildlife Trust in Kenya. Our support is generally for a period of three years, enabling organisations to work towardsbecoming financially self-sustaining.

Business in the Community reported our total direct and in-kinddonations for 2007/08 as £5.7 million. Of these, our directcharitable donations amounted to £398,000. Over the past yearwe have donated more than £821,000 surplus merchandise,such as blankets to charities in the UK and overseas.

We continue to be a member of both the London BenchmarkingGroup (LBG) and Business in the Community’s (BitC) PercentClub. The LBG’s benchmarking model is used to assess ourtotal contribution to the community.

Employees fundraisingOver 4,000 retired and current employees donated £611,480to their chosen charities through our Giving Scheme. In addition,we hosted 10 fundraising events which raised over £160,000for a range of employee-supported charities. Our colleaguesparticipate in the annual British Airways Fun Run for CancerResearch UK and over the past 14 years have raised in excessof £735,000.

Partnerships through educationIn the UK, through our corporate partnership with the NaturalHistory Museum, we have developed programmes to provideopportunities for pupils at Heathrow schools to visit theMuseum, meet scientists and experience the work of theDarwin Centre. We are working closely with Reading isFundamental, a national organisation that promotes reading in schools. We have funded five primary schools in the LondonBorough of Hounslow, enabling them to participate in theinitiative and attend educational programmes at the BritishAirways Community Learning Centre.

Overseas, we have been working with the Mukuru PromotionCentre in Nairobi, Kenya for over five years, supporting over4,000 children and their teachers in four schools through thedevelopment of education and training programmes. Fifteenteachers have participated in teacher exchange programmes to gain a better understanding of both the UK and Kenyaneducation systems. This programme will continue to bedeveloped in 2008/09.

The British Airways Community Learning CentreThe British Airways Community Learning Centre is located nextto our Waterside head office and has welcomed 45,000 youngpeople and adult learners since its opening in 1999. Interactive,airline focused programmes relevant to the school curriculumare delivered to local school students; they include, customerservice, environmental education, languages, Information andCommunication Technology and global education weeks whichfocus on communities in which we operate.


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The Sheldrick Wildlife Trust Kenya,supported by British Airways.

Change for Good, which istransforming the lives of childrenacross the world, has reached itsmilestone of raising £25 million.



Community Investment continued

Change for GoodChange for Good, which is transforming the lives of children acrossthe world, has reached its milestone of raising £25 million.

British Airways has worked in partnership with UNICEF UK onthe Change for Good programme since 1994.

Donations are made to Change for Good by our customers onboard our aircraft by using envelopes provided in the seatbackpocket, headset pack or from a member of cabin crew. To date,we have over 2,400 cabin crew champions promoting Changefor Good.

During 2007/08, we raised £1.3 million that was invested inprojects in countries that we fly to. Projects that have benefitedfrom customers’ donations include:

Morocco £100,000 given to a street children project

Egypt £200,000 was given to support a street childrenproject in Cairo

Ghana £300,000 to benefit a HIV/AIDs school-basedprevention project

Tanzania £300,000 donated to a community-based careprogramme for children with HIV/AIDs.

We have also supported emergencies in Bangladesh, £75,000;South Asian Floods £150,000; Darfur, Sudan £75,000 andMyanmar £300,000 as well as donating free of charge cargospace to UNICEF to transport vital supplies to both China andMyanmar. The emergency donation will be used by UNICEF tohelp supply basic equipment such as water purification tablets,drugs, medical supplies, water kits, oral rehydration salts, latrine pans and tarpaulins to the millions left homeless.

If you would like to make a donation to Change for Goodplease go to: www.ba.com/changeforgood.

Sreepur Project in Bangladesh Pat Kerr, formerly British Airways cabin crew, set up SreepurVillage, which provides sanctuary for 600 children and over100 women.

Pat Kerr’s objective is to provide a refuge for women andchildren who are alone and in danger. The project providesfood and shelter, vocational training and skills for the women inSreepur and the surrounding communities, as well as educationfor the children.

The ingredients for handmade paper (water hyacinth and jute)grow wild all around the village. The traditional Bengali paper-making facility has grown and ‘Sreepur Village Cards’ is today a successful business, employing many of the Sreepur women.

Women make the cards at home, for which they are paid a fairwage without having to leave their children. With the help ofBritish Airways the charity is able to bring the cards back to the UK and return every penny from sales to Sreepur Village.

Sreepur Village cards export worldwide, for more informationvisit: www.sreepurcards.org.

British Airways in South AfricaIn 2003 a partnership was formed between British Airways, the Foreign and Commonwealth Office, the MetropolitanPolice Southwark, Charlton Athletic Football Club and theSouth African Police Service. The aim was to develop strongcommunity partnerships between young people, the localcommunity and the South African Police Service in the

Pat Kerr, formerly British Airwayscabin crew, set up Sreepur Village,which provides sanctuary for 600

children and over 100 women.



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Township of Alexandra in Johannesburg. This was developedthrough a sports and health education programme. BritishAirways has supported the initiative by providing flights, cargospace and excess baggage for the partners as well as runninghealth and wellbeing workshops for the young people whoparticipated in the programme.

In 2007 this successful model was extended to two furthertownship communities, Mitchells Plain and Khayelitsha in CapeTown. Since the programme started, over 12,000 youngpeople have participated in the project and 100 youth coachesthat include teachers, police officers and local communityworkers have been trained in the Level 1 Football Association’scoaching qualification. This is the first time this qualification hasbeen allowed to be used outside of the UK.

2008 will see the project extending to Durban with a plannednational roll-out across South Africa in partnership with theForeign and Commonwealth Office, the Metropolitan Police, theSouth African Police Service and Charlton Athletic FC by 2010.

British Airways and JACK Forty three officers from across the Metropolitan Police, BritishTransport Police and Essex Police were supported by BritishAirways who flew the team out to New York to undertake a 36-mile uniformed run around Central Park to raise money for theJACK (Joining Against Cancer in Kids) Foundation. This is BritishAirways’ third year of support. It is estimated that money raisedfrom the NY-LON charity run should reach in excess of £45,000.

Seeing the group off from Heathrow were Commissioner ofthe Metropolitan Police, Sir Ian Blair and British Airways ChiefExecutive, Willie Walsh.

One of the Corporate Responsibility team received a boroughcommendation which is one of the highest police honours in recognition of her dedication and commitment to the JACK appeal.

Broadwater Farm UnitedBroadwater Farm United is a youth football team started byClassford Stirling, local resident and community worker on the Broadwater Farm Estate, north London. British Airwaysprovided flights, kit and support to the team.

Broadwater Farm United under 13s were selected to representEngland in the Tokyo International Youth Tournament in Aprilby invitation from the Governor of Tokyo. The team visited 10 Downing Street to meet with Sarah Brown and CultureMinister Andy Burnham.

What next?• Work with young people as the official airline of 2012

Olympic and Paralympic games and developed BritishAirways Olympic Youth Bursary Scheme;

• Develop an innovative centre of learning for the communityin the Heathrow area;

• Celebrate 15 years of Change for Good in 2009;

• Continue support for our community and conservationprogrammes; and

• Further develop the British Airways Global Communityvolunteering awards for employees to benefit their chosen charities.

Members of Broadwater FarmUnited under 13s team visiting

10 Downing Street.

Member of Charlton AthleticFootball Club coaching children in Cape Town.



Marketplace – customers

Our customers are our business. It is important that we engage and work with our customers to build a sustainable business. It is equally important that we shareour achievements with our customers, building our reputation, so that they chooseto fly with us time and time again.

Environment

Wellbeing

Tourism

Waste

Investment

Engagement

Our plan

Customer-enabled carbon offsettingProvide opportunities for customers to offset their travel-related carbon emissions simply and conveniently.

Customer experienceWork with stakeholders to provide improved customer service across the passenger journey, from booking to destination.

Sustainable tourismWork in partnership to deliver a vision and strategy for a sustainable outbound UK tourism industry.

Customer facilitationImplement opportunities for our customers to recycle their waste during their journey.

Products and servicesInvesting in innovative and sustainable products and services that enhance the customer experience.

Customer engagementActively listen to the views of our customers, through market research, focus groups, and other engagement channels.



Customer engagementba.comIn January 2008, we upgraded our Corporate Responsibilitywebsite ‘Respecting our World.’ The site features the four keyCorporate Responsibility areas of Environment, CommunityInvestment, Marketplace and Workplace. It also providesinformation on responsible growth for aviation, future Heathrowdevelopment plans and information on responsible travel.

Also, in January 2008 we significantly upgraded our carbonoffset scheme for passengers, introducing a highly-visible, ‘oneclick’ option into the booking process on ba.com. Customersnow have the option to offset the carbon emissions of theirjourney when they book their ticket, with all proceeds goingtowards UN-certified emission reduction projects.

On board our aircraftWe introduced ‘The Green Wing’ in our High Life magazine, a column dedicated to the CEO answering questions onconcerns about the effects of aviation on the environment. We have also had regular Corporate Responsibility features in both High Life and Business Life magazines.

Customer experienceThe wellbeing of our customers is extremely important to us. Every year, we research and listen to the views of over600,000 customers. As a result we continually seek to offer a range of high quality products and services to meet theneeds of our customers.

Kids’ CouncilThis year, we have also sought the advice of young travellersthrough our newly-launched Kids’ Council, the first group of itskind of any airline. The Kids’ Council provides young peoplewith the opportunity to genuinely influence the British Airwaysflying experience. Children from Hong Kong, Uganda, Mexico,Nairobi and South Africa flew to Heathrow to join Councilmembers from the UK. When asked what they would like tosee more of on board, technology was top of the agenda.

Club WorldThe Club World product has recently been redesigned. In2007/08, we finished fitting the new Club World cabin to allour Boeing 747 aircraft and have been preparing to introduceit on our Boeing 777s. The new cabin combines comfort,control and privacy. It features club kitchen where customerscan find a wide range of hot and cold food. A newly designedseat, a softer mattress, memory-foam headrest and cosy quiltmean that customers can comfortably stretch out on a fully flat bed and sleep in privacy behind a touch button screen.

Terminal 5Preparing for our move to Terminal 5 has been a major focusthis year. The building boasts a wide range of options for eating,drinking and relaxing as well as the world’s largest loungecomplex for premium passengers. Environmental excellencewas at the forefront of the design and delivery of this project.Despite the initial difficulties on opening, this state-of-the-artbuilding will progressively offer a smoother check-in, andimproves customer flow through the airport. In the table below,you can see our progress on these fronts from opening andthrough the switches.

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Terminal 5, Heathrow is a state-of-the-art building and will progressively

offer a smoother check-in, andenhance the customer experience.

Terminal 5 customer experience First switch PerformanceThe performance since switch two

opening (excluding (from June 11 Bestweek week one) 2008) performance Target

Fast bag drop time 133 secs 124 secs 114 secs 81 secs 121 secs

Departures leaving within 15 minutes 22% 61% 79% 87% 63%

Regularity (how much of our planned operation we delivered) 84% 98% 100% 100% 100%

Missed bags per 1,000 passengers 195 55 27 22 31

Average taxi time to stand on arrival 14 mins 10 mins 8 mins 8 mins –

Average time of bags to carousel 39 mins 25 mins 22 mins 19 mins –

Arrivals punctuality 16% 38% 58% 72% –

Data from 27 March 2008 to 11 June 2008.


Audiovisual on demandOur new in-flight entertainment system is now available on allour Boeing 747s and Boeing 767s, offering increased choiceand control to our customers with more than 200 movies, TV shows, audio options and interactive games. We have seenmarked improvements in satisfaction among passengers whohave used the new system.

Service styleWe are committed to providing excellent service and this yearwe have updated and modernised our service style vision,driven directly by feedback from employees. We are nowmaking sure everyone is aware of the new service style to helpthem offer a brilliant service across all areas of the business.

Baggage policyAs a result of the lifting of hand baggage restrictions by the UK Department for Transport, with the exception of Newquayairport, we were able to reintroduce our hand baggage allowanceof two pieces for all passengers travelling to, from and throughUK airports.

We also launched our new checked baggage policy. First andClub World passengers are now entitled to three bags. Inaddition, unlike many of our competitors, all of our customersare now able to carry, free of charge and in addition to theirnormal checked baggage allowance, one piece of sportingequipment, from our defined list of sporting items.

British Airways World CargoIn September 2007, the LIFT loyalty and reward programmewas launched to support key regional customers. Theprogramme is the first of its kind in the air cargo industry and this is reflected in the high level of customer enrolment.Premia, our new premium products facility at Heathrow, hasseen its first full year of operation. Volumes of specialist andtime-sensitive cargo have increased significantly as ourcustomers have recognised the added value that our newbuilding provides to the logistics supply chain.

What next?• Holding corporate customer forums to exchange information

and develop ideas and initiatives, to work together to build asustainable business;

• Developing our responsible traveller programme and work in partnership to deliver this;

• We are partnering Forum for the Future, ABTA, and the transportand tourism industry in a project to develop a high level visionand strategy for a sustainable outbound tourism industry;

• We will pursue Leadership in Energy and EnvironmentalDesign certification for our building project at our terminalbuilding at New York’s JFK airport;

• Take delivery of four Boeing 777-200 ER aircraft during early2009. These aircraft will continue our commitment to deliverthe best travel experience to our customers;

• Communicating our key environmental initiatives in ourlounges, and installing recycling bins in our lounges;

• Upgrading the existing estate of over 50 British Airwayslounges. Environment will play a key in the refurbishment;

• Holding a second Kids’ Council to listen to the opinions of our youngest customers, and developing an online kids’forum to allow more children to tell us their views; and

• Continue to improve our First Class catering with a movetowards seasonal menus, with an emphasis on locallysourced and produced food.


Marketplace – customers continued



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Marketplace – suppliers

We value the vital role our suppliers play in supporting our customers and ouroperations. We work in partnership to deliver responsible procurement across our supply chain.

Environment

Wellbeing

Diversity

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Our plan

Environmental impactReduce the environmental impact of our supply chain with a particular focus on carbon footprint.

Ethical sourcingEnsure good working conditions throughout the supply chain.

Supplier diversityEncourage the diversity of the supply chain and workforce, and ensure equal opportunities for all suppliers.

Supplier awarenessBuild consideration of waste minimisation and recycling into the procurement process.

Technology and processWork with our suppliers to invest in new technologies and innovative processes, recognisinginvestment may require longer payback periods.

Supplier engagementActively listen to the views of our suppliers, and work in collaboration with them to deliverour responsible procurement strategy.



Supplier marketOverall supplier costs, excluding fuel, were held flat over theyear, despite significant inflationary pressures on suppliers’ own costs.

We had a busy year with our suppliers, with a number of majorsourcing projects either started or completed during theperiod. We placed new aircraft orders with Airbus and Boeingfor 12 Airbus A380 and 24 Boeing 787 aircraft. We have alsobegun to review our in-flight catering needs at Heathrow, witha new supply contract required by March 2010. Additionally,the launch of our OpenSkies subsidiary in mainland Europe,and direct flights from London City to the US, will mean newwork with suppliers.

Supplier riskOur procurement team records and measures risk across ourmost important suppliers. We have currently identified 25suppliers who, if they ceased trading or experienced severeoperational difficulties, would have a serious impact on ourability to operate. For these suppliers, risk is measured acrossfive dimensions, updated each month and we take mitigatingaction when any supplier is deemed to be at risk.

In addition to managing risks relating to key suppliers, we alsoroutinely monitor the financial health of a number of othercritical suppliers using monthly Dun & Bradstreet companyreports. This information provides an early warning ofincreased risk.

We use Business Continuity Plans to cover the risks of supplyfailures from our key suppliers and we test these plans regularly.Equally, we make sure contingency plans are in place to respondto any supply interruption, from securing alternative suppliers,switching to the use of our own resources, or scaling down theservices required.

Payment performanceWe have again made good progress on paying supplierspromptly. On average, 88 per cent of payments were on timein the UK for the year ended March 31, 2008. This compareswith 84 per cent in the preceding year.

Next year our aim is to maintain this momentum andeventually to achieve a target of 90 per cent on time paymentsworldwide. Increased use of e-invoicing and purchasing cardswill help us in this effort.

We are a signatory to the Confederation of British Industrycode of practice on supplier payment and are committed topaying our suppliers on agreed terms. The number of days‘purchases in creditors’ at March 31, 2008 is calculated inaccordance with the provisions of the Companies Act 1985and was 33 days (2007: 34 days).

Procurement deliveryWe are committed to driving spend through preferred suppliers.In December 2007, 97 per cent of our external spend waswith 2,050 suppliers and they have been awarded formalpreferred supplier status. We have also focused on ensuringour spend is committed through our approved order-basedprocess, and in December 2007, 99 per cent of spend wasthrough this process.

What we have achieved so farAt the end of September 2007, we announced the purchaseof new aircraft to replace some of our Boeing 767-300 and747-400s. Environmental performance was one of the keyfactors in the longhaul purchase decision. The engines thatpower both the A380 and Boeing 787 are cleaner and quieterthan the engines they replace.

In November 2007, working with London Remade and ActionSustainability, we evaluated British Airways procurement againstthe Flexible Framework developed as part of the SustainableProcurement Task Force recommendations. The result of thisevaluation has helped develop the next steps in our process.

Our customers are now able to enjoy 100 per cent RainforestAlliance coffee onboard flights – making a valuable contributionto sustainable development. The coffee comes from farms thathave been certified by the Rainforest Alliance. The farms areonly given certification if they have met strict guidelines on allaspects of production, including protecting the environment,the rights and welfare of workers and looking after the interestsof coffee-growing communities.

Marketplace – suppliers continued


Our worldwide furniture management contract with Amaryllispromotes waste minimisation, including the reuse and recyclingof office furniture.

We invested £25 million in new fleet and equipment forTerminal 5, including 38 new buses that meet the future Euro 5 standard.

We adhered to a strict materials strategy in Terminal 5 toreduce the use of environmentally sensitive materials. In ourlounges all our furnishings are manufactured using timber fromsustainable sources. The carpets are PVC-free and completelyrecyclable. At the end of their life they will be recycled intomore backing and more nylon for new carpet. The showerpavilions are decorated with a material that looks like timberbut is in fact made from recycled milk bottles.

Following a rigorous procurement process which took intoaccount lifetime carbon costs, we are replacing our sales carfleet with Honda Hybrid Civics, reducing our car fleet CO2

emissions by a third.

We have recently engaged with selected suppliers to identify a service partner to provide aircraft catering at Heathrow andGatwick from 2010. At the outset, the challenge was set toachieve a ‘quantum leap in environmental performance’.Suppliers were encouraged to look at novel and innovative use of technology, materials selection and product sourcing. In particular, emphasis was focused on energy conservationand the minimisation of packaging and waste.

We have been working with Grundon, our waste managementservice partner, to identify ways to minimise waste, increaserecycling and reduce dependency on landfill. Although waste issegregated for recycling or placed through a materials recyclingfacility, a proportion is still sent to landfill. We have recentlynegotiated capacity at the local Waste to Energy plant operatedby Grundon. This is expected to come online in the autumn of2008. To ensure that this option is available into the future, wehave extended the duration of the contract beyond the normalperiod of five years.

What next?• Communicate to our buyers our responsible procurement

objectives. We are planning a number of training workshopsto engage with our procurement professionals;

• Communicate our Corporate Responsibility requirements toour suppliers, and work with them to develop competitiveadvantage in this area;

• Continue to survey potential suppliers to assess theirCorporate Responsibility credentials, we will look at usingindependently-held, self-certification data to better informsupplier selection decisions;

• Hold a supplier forum to engage with our suppliers on ourpriority impacts;

• Continue to develop effective performance measures;

• Continue to be innovative in our approach toproduct/service selection; and

• Identify additional partners to help us achieve ourresponsible procurement strategy.


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We work with our suppliers toinvest in new technologies and

innovative processes that enhancethe customer experience.



Workplace

We provide a working environment that motivates, engages, supports and developsour colleagues. Our strategy is to deliver a more sustainable working environmentfor all, and make British Airways a great place to work.

Environment

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Our plan

Carbon footprint educationLaunch campaigns to help our colleagues understand the size of their own carbon footprintand what they can do to reduce this.

Responsible employerProvide a working environment that motivates, engages, supports and develops our people,through the change programme.

Diversity and inclusionRecognise the value of how the diversity of our colleagues contributes to our business and its success.

AwarenessHeighten awareness of waste reduction options, and improve the convenience of recycling in the workplace.

Responsible colleaguesInvest in infrastructure to enable all of us to be more environmentally responsible such as through developing our car sharing and cycle to work schemes.

Recognition and rewardIncrease our network of Corporate Responsibility Champions across the business to drive responsible behaviour, engage individuals locally, and identify local opportunities.Provide reward for individuals who have gone beyond the call of duty in terms of Corporate Responsibility.


British Airways valuesWe have defined our corporate values as part of the businessplanning process. All training programmes now contain amodule which helps customer service colleagues understandhow they can demonstrate commitment to our values in thework they do – safe and secure, responsible, warm, thoughtful,professional and British. Our recruitment processes have beenredesigned to make sure we select people who can clearlydemonstrate these essential values.

A new change programmeWe have recently embarked on a culture change programmethat will transform British Airways into an organisation where innovation, growth and clear customer focus are the defining qualities.

The programme has five main themes:

• Colleagues – engaging our people to make British Airways a high performance workplace;

• Customers – focusing all our people to deliver consistentcustomer service;

• Partnerships – developing and maintaining world-classpartnerships with all key stakeholders, both internal and external;

• Performance – creating a performance-based culture; and

• Operational efficiency – driving continuous improvement,short and long term.

This work, led by the Leadership team, involves and engagesemployees right across our business.

TrainingWe delivered 235,000 days of training during the year, including30,000 training days to staff at Heathrow to support our moveto Terminal 5. Over the past year, some 3,100 people havejoined our Company. This has required a high level of inductiontraining. We have refreshed our new entrant training programmesto make sure they reflect the priorities in our business plan.

Following the government review of vocational education, led by Lord Leitch, we have explored how we can invest moreeffectively in the development of our employees to build boththeir skills and educational standards. We have become the firstnational airline recognised as a training centre by the City &Guilds and, from February 2008, all new entrant cabin crew will achieve an NVQ Level 2 qualification on completion of theirtraining. It is envisaged that further internal training programmeswill become accredited and that employees undertaking courseswill achieve nationally recognised qualifications.

Colleague involvementInvolvement of all colleagues continued to be a key focusduring the year. Colleagues are asked to give their views andopinions on a wide range of topics every year via the SpeakUp! opinion survey, administered by Ipsos MORI.

Results from the last survey showed significant improvementsover the 12-month period in the perception of the effectivenessof line managers. However, despite these positive trends, theoverall response rate to the survey – at just 35 per cent – waslow. Colleagues expressed concerns about our ability to provideexcellent customer service, reflecting some of the difficultiesover the summer caused by increased security arrangementsat UK airports.

Leadership developmentLeadership was a significant priority during the year. We havedeveloped a number of programmes to improve the capabilityand performance of our leaders. These included a one-dayprogramme for all managers, called ‘Leading the Business’,which focused on the challenges of managing change, engagingemployees and delivering results to support our businessstrategy. As a result of this programme, a leadership websitehas been developed which provides information and trainingmaterials to help managers with all aspects of their roles.

Other development programmes included a three-day‘Leadership Matters’ programme aimed at developing world-class leaders throughout the airline, including our pilot andcabin crew communities.

There will be increased focus on talent and leadershipdevelopment over the coming year as we build the capabilitywe need for growth.


Colleague involvement continuedto be a key focus during the year.Colleagues are asked to give their

views and opinions on a widerange of topics every year via the Speak Up! opinion survey,

administered by Ipsos MORI.

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Employee relationsDuring the year, we consolidated our UK operations in sixregional airports, and transferred ground roles to third-partyground handlers. This affected some 1,000 employees. Thoseaffected were helped to find alternative employment bothinside and outside the airline.

Since May 2007, we have held 113 full-day changeimplementation forums with employees represented by tradesunions. As a result, a further 55 key implementation agreementswere completed, delivering extensive change to workingpractices, industrial agreements, operational processes andsupport systems in readiness for the consolidation of ouroperations in Terminal 5.

Following the threatened cabin crew strike of early 2007, we committed ourselves to a fresh start. Since then we havecontinued to implement the settlement that was reached and to develop a better relationship with our cabin crew trades union.

Within Flight Operations, we have agreed radical changes withthe trades union in a far-reaching agreement on work coverage.This has involved changes to rostering rules, work biddingpractices, overtime payments and reserve establishment.

We notified BALPA that we thought strike action would beunlawful, and BALPA did not call a strike.

Our Industrial Relations Change Programme is continuing. This brings together trades union representatives and managersin specific training and action planning events, to help us findways to solve problems together and involve colleagues acrossthe business.

RewardWe operate two funded principal defined benefit pensionschemes in the UK, the Airways Pension Scheme (APS) andthe New Airways Pension Scheme (NAPS). Both are closed to new members. From April 1, 2003 we commenced a newdefined contribution scheme, the British Airways RetirementPlan (BARP).

In February 2008, we also introduced a SmartPensionarrangement, which allows our UK-based employees to make their pension contributions in a more tax-efficient way.The changes were introduced with trades union support andaround 90 per cent of those eligible are now benefiting fromthis arrangement.

We operate an Employee Reward Plan (ERP) allowing our non-management workforce to share in the success of the business.The plan, introduced in 2005, awards amounts to employeesbased on our performance against a balance of financial andnon-financial measures. These measures cover operational,customer and financial performance and the plan helps toreinforce the importance of all the various factors that affectour overall performance.

Management bonus schemes use the same financial and non-financial performance metrics as the ERP, but also includeemployee involvement as a further measure. Our managers are also rewarded for their individual contribution towardsachieving the Company’s goals and targets.

We also operate a recognition scheme, known as Bravo. Thescheme enables people across our business to be recognisedfor their efforts and achievements.

Diversity and inclusionOur Diversity team launched a new Diversity and InclusionStrategy during the year. This has two simple aims. Firstly, toensure that everyone understands why and how diversity isimportant to us and, secondly, to ensure that diversity isintegrated into every part of the business.

In the first phase of the strategy we used a survey, interviewsand focus groups to find out and discuss what harassment andbullying meant, and how awareness about this could be raised.A booklet and film were produced and these have beendistributed across the business. Further work on how bullyingcases are resolved and on the role mediation might play intackling harassment are also being explored.


Workplace continued


We focused on religion and belief throughout the year andsuccessfully defended an employment tribunal in November2007 in this regard. We have become a steering group memberof a new organisation called ‘Employers Forum on Belief ’ andwe have established a new interfaith network group whichmeets to discuss all aspects of religion in the workplace such as prayer rooms, catering and uniforms.

We also sponsored Gay Pride in London in July 2007. As well as having a positive commercial impact, there was also anopportunity for our people to show their solidarity bymarching together.

We consult with our disabled employee group to identifydisability issues and they help us to ensure that we are makingall our products, services and training fully inclusive andaccessible. All front line employees are trained in disabilityawareness to increase their knowledge about disabledcustomers and colleagues.

We are also constantly looking at how we can improve ourjourney experience for disabled travellers. We have put intoplace a disability strategy for the next four years, called‘Building Ability towards 2012’, which covers many areas and will ensure that we can meet the needs of all ourparalympic athletes.

Gender profilesTotal employees

Women

Men

Senior managers

Women

Men

Managers

Women

Men

43%

57%

27%

73%

37%

63%

AbsenceWe have continued to manage absence carefully and the latterpart of 2007/08 has seen the previous decline in attendancestart to improve, despite some trade union unrest and achallenging operating environment. Overall, this recovery hasresulted in the annual headline absence figure holding at 11.7average days per person per annum.

Through our Absence Management Policy, we support ouremployees’ absence, with managers undertaking return towork discussions with colleagues after each and every absence.British Airways Health Services provide occupational healthadvice, consultation, and guidance for intervention plans, andwork with BUPA for additional support. HelpDirect providesindividuals with confidential personal support.

Absence – average days per person per annum

Health and safetyIn 2007/08, there were a total of 23 major injuries recordedacross our business. The majority of these injuries related toemployees slipping or tripping.

Manual handling injuries continue to be the most commoninjury. In conjunction with our employer’s liability insurers, weare introducing a series of focused training programmes acrossour business. Baggage and loading staff have completed theirtraining whilst cabin, flight, engineering and cargo crew arescheduled to start training later in the year. Employees injuredwhilst at work are able to benefit from a company-sponsoredrehabilitation programme. This benefit has been extended toemployees who are injured away from work to help themreturn to work as soon as possible.

Our behavioural safety programme, Rampsafe, continues to deliver safety improvements with a reduction in damage to aircraft and equipment.

January 20082003 baseline 16.7

11.7


Baggage and loading staff havecompleted their manual handling

training whilst cabin, flight,engineering and cargo crew are

scheduled to start training later inthe year. Each training programmewill focus on risks associated withthe specific roles and we will do a

root cause analysis with employeeswho report an injury.

Overview

Environment

Com

munity Investm

entM

arketplaceW

orkplace


Employment tribunalsDuring 2007/08, the Group was served with 69 newproceedings in the Employment Tribunals. Of these, eightclaims were multi-applicant proceedings, i.e. there is more than one claimant. Seventeen of the claims were for unfairdismissal, or unfair dismissal plus other claims of which nonewere discrimination claims. Thirty of the claims were fordiscrimination, or discrimination plus other claims. For the firsttime, therefore, the number of claims including a discriminationelement outweighs the number of claims for unfair dismissal.

What next?• Recruit more Corporate Responsibility Champions and

Ambassadors from across our airline;

• Facilitate everyone having the opportunity to understand their personal carbon footprint through providing a carbon calculator;

• Enhance our reward and recognition programme forindividuals who have gone beyond the call of duty in terms of Corporate Responsibility;

• Launch our new corporate change programme to re-energiseand engage all of us; and

• Develop our company travel plan, providing facilities toenable people to cycle to work and to car share.


Workplace continued


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Printed by LPC Printing Ltd on behalf of RR Donnelley

This report is printed on Revive 100 Uncoated which contains 100% recycled and de-inked pulp from post consumer waste which has been FSC (Forest Stewardship Council) certified.

It is 100% recyclable and biodegradable and has been printed by LPC using printing inks that are made with non-hazardous vegetable oil from renewable sources.Over 90% of solvents and developers are recycled for further use and recycling initiatives are in place for all other waste associated with this production. LPC have strict procedures in place to safeguard the environment through all our processes.


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